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Deposits Held in Trust
In all cases, trust deposits must have named persons as beneficiaries to be eligible for separate deposit insurance protection. The following information should be disclosed on the records of the member institution:
These deposits are also insured separately from deposits made directly by the beneficiary in his or her own name. However, at each member institution, all eligible deposits in trust that have the same trustee and the same beneficiary are combined, and the total is insurable only to a maximum of $100,000, including accrued interest.
In all cases, trust deposits must have individuals as beneficiaries to be eligible for separate deposit insurance protection. Deposits held in trust for a purpose, such as the construction of a school, do NOT qualify for deposit insurance protection separate from other deposits held in the trustee's name at the same member institution.
If there is more than one beneficiary of an eligible deposit that is held in trust, the amount or percentage of each beneficiary's interest in the deposit must be disclosed on the member institution's records. The trustee must provide the member institution with updated information relating to the interest that each beneficiary has in the trust as of April 30th each year, by May 30th of the same year. The requirement that this information be disclosed on the member institution's records may be fulfilled by including it in the institution's electronic account records system, or in the paper files associated with the deposit.
Specified trustees responsible for deposits whose beneficiaries change frequently (solicitors, for example) are permitted to use an alphanumeric or other identifier maintained by the member institution which corresponds to the trustee's records disclosing the name, address, and the particulars of the amount or percentage interest of each beneficiary in the deposit as noted above.
CDIC will not provide separate insurance coverage for eligible deposits that are held in the name of a depositor who is acting as trustee under a trust if it concludes that the trust was set up primarily to obtain or increase deposit insurance coverage.
Provided these criteria are met, CDIC insures the amount of each beneficiary's interest in eligible trust deposits up to $100,000, including principal and interest.
Last modified : 7 July 2005
- the fact that the deposits are held in trust;
- the name and address of the trustee (or of each co-trustee);
- the name and address of the beneficiary (or of each beneficiary if there are two or more);
- if there are two or more beneficiaries, the percentage or amount of each beneficiary's interest in the trust.
These deposits are also insured separately from deposits made directly by the beneficiary in his or her own name. However, at each member institution, all eligible deposits in trust that have the same trustee and the same beneficiary are combined, and the total is insurable only to a maximum of $100,000, including accrued interest.
In all cases, trust deposits must have individuals as beneficiaries to be eligible for separate deposit insurance protection. Deposits held in trust for a purpose, such as the construction of a school, do NOT qualify for deposit insurance protection separate from other deposits held in the trustee's name at the same member institution.
If there is more than one beneficiary of an eligible deposit that is held in trust, the amount or percentage of each beneficiary's interest in the deposit must be disclosed on the member institution's records. The trustee must provide the member institution with updated information relating to the interest that each beneficiary has in the trust as of April 30th each year, by May 30th of the same year. The requirement that this information be disclosed on the member institution's records may be fulfilled by including it in the institution's electronic account records system, or in the paper files associated with the deposit.
Specified trustees responsible for deposits whose beneficiaries change frequently (solicitors, for example) are permitted to use an alphanumeric or other identifier maintained by the member institution which corresponds to the trustee's records disclosing the name, address, and the particulars of the amount or percentage interest of each beneficiary in the deposit as noted above.
CDIC will not provide separate insurance coverage for eligible deposits that are held in the name of a depositor who is acting as trustee under a trust if it concludes that the trust was set up primarily to obtain or increase deposit insurance coverage.
Provided these criteria are met, CDIC insures the amount of each beneficiary's interest in eligible trust deposits up to $100,000, including principal and interest.
Trust Accounts: Example 1
CDIC fully insures the following deposits at a member institution, provided that they meet the conditions outlined on the previous screen and the deposit insurance eligibility criteria:
| Depositor | Details | Insured | Uninsured |
| Sam (in his own name) | Term Deposits $50,000 (value at maturity) | $50,000 | - |
| Joan (in her own name) | Savings/chequing $35,000 | $35,000 | - |
| Sam in trust for Joan's Total * | Term deposits $65,000 Savings $45,000 $110,000 |
$100,000 | $10,000 |
| * Sam is executor of an estate of which Joan is a beneficiary. | |||
Trust Accounts: Example 2
| You | |
| Savings account | $30,000 |
| Guaranteed Investment Certificates (value at maturity) | $45,000 |
| Total, including | $75,000 |
| Your child | |
| Savings account | $5,000 |
| Guaranteed Investment Certificates (value at maturity) | $20,000 |
| Total, including interest earned | $25,000 |
| You, in trust for your child | |
| Guaranteed Investment Certificates (value at maturity) | $70,000 |
| Since the deposits held in trust are insured separately, your total personal deposits remain less than CDIC's $100,000 insurable maximum, as do those of your child. | |
Trust Accounts: Example 3
You are the trustee for an eligible deposit held in trust at a CDIC member institution. The member's records identify your three children as the beneficiaries, and each has a one-third interest in the deposit.
The total value of the deposit is $150,000, including interest.
The deposit is fully insurable by CDIC, since each beneficiary's share ($50,000) is less than the maximum coverage provided by CDIC to each beneficiary.
Last modified : 7 July 2005
